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Dollarama earnings increased to C$59.8 million

Staff writer ▼ | September 12, 2013
Dollarama reported results for the second quarter ended August 4, 2013. Net earnings increased to $59.8 million, or $0.82 per diluted share, compared to $49.8 million, or $0.66 per diluted share, for Q2 2013.
Dollarama
DollaramaDollarama reported results for the second quarter ended August 4, 2013. Net earnings increased to $59.8 million, or $0.82 per diluted share, compared to $49.8 million, or $0.66 per diluted share, for Q2 2013.


Sales for the second quarter of Fiscal 2014 increased by 16.0% to $511.3 million from $441 million in the corresponding period of the prior fiscal year (all amounts in CAD).

The increase was driven by the growth in the number of stores over the past twelve months from 735 stores on July 29, 2012 to 828 stores on August 4, 2013, and continued organic sales growth driven by comparable store sales growth of 6.2% in the second quarter of Fiscal 2014, over and above comparable store sales growth of 7.3% in the second quarter of Fiscal 2013.

Comparable store sales growth for the second quarter of Fiscal 2014 consisted of a 4.6% increase in average transaction size combined with a 1.5% increase in the number of transactions. In the quarter ended August 4, 2013, 62% of our sales originated from products priced higher than $1.00 compared to 56% in the corresponding quarter last year.

Debit card penetration also increased, as 41% of sales were paid with debit cards compared to 39% in the corresponding period of the previous fiscal year.

The gross margin stood at 36.6% of sales in the second quarter of Fiscal 2014, compared to 36.9% of sales in the second quarter of Fiscal 2013, mainly due to the fact that stable product margins were offset by additional occupancy and logistics costs associated with the increased pace of new store openings in the second quarter of Fiscal 2014. The cost impact associated with the acceleration of net new store openings is expected to decrease in the second half of Fiscal 2014.

General, administrative and store expenses ("SG&A expenses") for the second quarter of Fiscal 2014 decreased to 17.9% of sales, compared to 18.3% of sales in the corresponding period of Fiscal 2013. SG&A expenses in the second quarter of Fiscal 2014 stood at $91.6 million, a 13.2% increase over $80.9 million in the corresponding period of Fiscal 2013.

The increase is due primarily to the opening of 93 net new stores over the past twelve months. The Corporation's ongoing productivity initiatives are expected to result in a slight improvement in our SG&A expenses as a percentage of sales for Fiscal 2014 when compared to Fiscal 2013.

Net financing costs decreased by $0.3 million, from $2.6 million for the second quarter of Fiscal 2013 to $2.3 million for the second quarter of Fiscal 2014. This decrease is attributed to lower interest rates on the long-term debt and lower financing costs compared to the second quarter of Fiscal 2013.


 

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